Lilly extends its streak of PhIII failures, scraps another program

David Ricks, president of Lilly Bio-Medicines

Eli Lilly extended its streak of Phase III flops today, reporting that its depression drug edivoxetine (LY2216684) failed to beat out a placebo in a slate of three Phase III studies. And the pharma company ($LLY) said it will add the drug to its growing scrap heap.

"Lilly undertook a robust Phase III program to address a significant unmet need for people suffering from depression," said David Ricks, senior vice president and president of Lilly Bio-Medicines. "However, the lack of efficacy compared to SSRI alone in three separate clinical trials means that Lilly will not proceed with development of edivoxetine as an add-on treatment for depression."

Lilly had hoped that the drug--which inhibits the reuptake of norepinephrine--could be successful as an add-on therapy in depression. The drug never scored excited blockbuster projections from analysts. Mark Schoenebaum at ISI says the average sell-side projection on peak sales for the drug was about $300 million. Nevertheless, the fresh setback forced Lilly executives to take a defensive posture today, insisting that a lineup of drugs under regulatory review and more drugs in the pipeline will position the company for success after a lengthy drought of new approvals and growing generic competition.

Outside of the diabetes arena, though, Lilly has stumbled from one late-stage failure to the next. Most recently ramucirumab failed for breast cancer, its best shot at finding a lucrative market for that drug. And its string of major pipeline failures in the last two years ranges from the Phase III defeat of solanezumab for Alzheimer's to the flop of pomaglumetad methionil for schizophrenia. The company made a rare acquisition of Amyvid, an imaging agent for Alzheimer's, but Medicare won't reimburse for it.

The setbacks have come as Lilly was hit by the loss of Zyprexa exclusivity, with generic competition for Cymbalta looming. The Phase III failure raises further questions about the pharma giant's focus on neurosciences, where the odds of success in general have been very low. It will also spur new questions about Eli Lilly's decision several years ago to largely stick with its internal strategy, steering clear of any major R&D reorganization or rethinking its research process.

Company executives, who have been on the defensive about their R&D track record, aren't likely to be celebrating today. But they continue to insist that everything is fine.

"Despite this news, we remain focused on implementing our innovation-based strategy," said Derica Rice, executive vice president, global services and chief financial officer, in a statement. "We've made substantial progress on our number one priority--advancing our pipeline. This year alone, we submitted four potential new medicines to regulatory authorities with more anticipated next year. In addition, we expect to begin launching new products in 2014 and are on track to return to revenue growth and margin expansion in 2015 and beyond."

"I think that we're beginning to see the light at the end of the tunnel here," Lilly CEO John Lechleiter recently told The Wall Street Journal's Peter Loftus. "There's no question sticking to this strategy takes measured courage because you can never really prove to anyone that the way you view your pipeline is the correct way, versus the way skeptics might look at it."

Schoenebaum recently wondered what Eli Lilly's Plan B was if the pipeline fails to deliver. Plan A in neurosciences appears to be a clear loser. And in an industry that has seen widespread upheaval in R&D among the Big Pharma companies, the day of reckoning for Lilly could be drawing closer.

- here's the press release

Special Report: The top Phase III R&D setbacks of 2013 - Ramucirumab - Eli Lilly

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